S.J. home market shows signs of life

Since the housing bubble's spectacular collapse and California's home-building industry lay nearly comatose for more than two years, housing starts have begun to recover this year.

Reed Fujii

Since the housing bubble's spectacular collapse and California's home-building industry lay nearly comatose for more than two years, housing starts have begun to recover this year.

And even in the Central Valley, in some ways ground zero for the prime mortgage meltdown, there are signs of new life, builders and industry officials report.

Through the first six months of this year, builders took out more than 12,100 building permits statewide, an increase of nearly 7 percent from the nearly 11,400 issued in the first half of 2011, according to the California Department of Finance.

Construction of apartments and condominiums is up even more, about 18 percent, to more than 13,800 units in the first six months of this year.

In San Joaquin County, where the rate of home foreclosures has often led the nation's largest metropolitan areas, home builders were discouraged, unable to compete with the price of distressed housing coming on the market.

But a dwindling inventory of existing homes in the regional market is raising prospects for home builders, including Lafferty Communities, a San Ramon builder offering upscale homes on the site of the former Manteca Waterslides in Manteca.

"Frankly, there just isn't a lot for buyers to choose from in the resale sector right now," the company's chief executive, Richard Lafferty, told The Wall Street Journal in a Sept. 19 article.

Lafferty said he had sold 14 homes, priced in the mid-$400,000 range, in the prior three weeks and that he expected to sell 50 homes in the Oakwood Shores subdivision this year.

During the market's peak, homes in the area sold for as much as $900,000, the Journal reported.

Lafferty purchased the project in 2009 from three banks that had taken over some 450 lots and 25 unfinished homes.

"At this stage in the game, we're looking really smart," he said.

But Oakwood Shores looks like something of an exception in a generally slow home-building market to John Beckman, executive officer of the Building Industry Association of the Delta.

"If you look around the county, ... those homes in Manteca are probably the only upscale homes you can get right now in the market," he said last week. "So the folks who want that type of home are going to that project in Manteca."